AMD Lawyer Hoped For A Big Day In Court

For a guy who just helped his client to a $1.25 billion payday, Chuck Diamond sounds a little wistful. He doesn’t get to mount what might have been the mother of all antitrust trials.

Associated Press

Chuck Diamond

Diamond, of O’Melveny & Myers LLP in Los Angeles, was lead counsel for Advanced Micro Devices in a legal attack against Intel that began in 2005 with a lawsuit filed in federal case in Delaware. It ended Thursday, with the early-morning announcement of a settlement that brings a degree of peace between the warring Silicon Valley chip makers.

“The client is elated,” Diamond said in an interview. But he added: “I’m a trial lawyer; any settlement is somewhat bittersweet.”

This was not just another lawsuit. Intel puts the evidence gathered at 200 million pages, mainly consisting of emails and other documents in electronic form.

AMD estimated this fall that the parties exchanged more than four trillion bytes of data from more than 550 AMD and Intel employees. (For reference purposes, AMD says, a terabyte of email is about 72 million pages, fitting in 28,670 boxes if printed out). Another terabyte came from 60 employees of computer makers who bought chips from the companies and other third parties.

If five terabytes would fit in more than 100,000 boxes, AMD figured, and an average pickup truck could haul one gigabyte, the evidence would represent about 5,000 truckloads.

As for depositions, the parties collectively deposed 309 witnesses spanning 479 seven-hour days of deposition. (Witnesses, not surprisingly, included such luminaries as former Intel Chairmen Andy Grove and Craig Barrett, as well as current executives such as CEO Paul Otellini). Assuming one could watch four hours of testimony on videotape per day, AMD reckons, it would take 556 days to get through it all.

“The AMD antitrust case has been massive, and it promised to become even more so, as the date for trial came closer,” said Paul Otellini, Intel’s chief executive, during a conference call.

It seems fair to assume there could have been some headlines of an unflattering variety for Intel as well-known industry executives mounted the stand next March, when the trial was scheduled to begin. A complaint filed last week by New York Attorney General Andrew, for example, quoted emails from people such as Michael Dell, founder of the computer maker.

The deal AMD cut is bound to be closely scrutinized. Besides the payment to AMD, Intel agreed not to cut sales deals that are conditioned on computer makers not dealing with AMD. (Intel insists it never did that anyway). The deal does not cover some sorts of retroactive rebates that AMD and regulators challenged; AMD, while withdrawing from government antitrust cases, reserved the right to keep pressing them to act against such rebates.

There are also some analysts who think Intel paid relatively little in view of its size and the issues concerned. Mike Feibus, a market researcher with TechKnowledge Strategies, says AMD was in a poor bargaining position; the company has heavy debts, and its deal to spin off manufacturing operations to a company called Globalfoundries allowed Intel to raise patent issues it could use for negotiating leverage. Intel is paying about the amount of cash it generated in just this year’s third quarter “to buy their way out of some very time-consuming and potentially costly lawsuits,” Feibus argues.

Diamond is not in position to question the decision to settle, but also suggests a trial would likely have brought his client a payment from Intel of more than $1.25 billion. “I’m convinced to a moral certainty that I could have had a jury bring in a larger number,” he says.